1.  Fixed Assets and Depreciation
 
 a) Fixed Assets are valued at cost of acquisition inclusive of any
 other cost attributable to bringing the same to their working
 condition.
 
 b) Fixed Assets manufactured/constructed in-house are valued at actual
 cost of raw materials, conversion cost and other related costs.
 
 c) Cost of leasehold land is amortised over the period of lease.
 
 d) Expenditure incurred during construction of capital projects
 including related pre-production expenses is treated as Capital
 Work-in-Progress and in case of transfer of the project to another
 body, the accounting is done on the basis of terms of transfer.
 
 e) Fixed assets retired from active use and held for disposal are
 stated at the lower of book value and net realisable value and are
 shown separately in the financial statements. Loss determined, if any,
 is recognised in the profit and loss statement.
 
 f) The company reviews the depreciation policies followed for various
 items of assets, its useful life and circumstances prevailing in the
 business so as to make a more appropriate preparation or presentation
 of the financial statements. Necessary adjustment is made in the
 depreciation charge for the assets, if any significant variation is
 noticed in the pattern of economic benefits embodied in the assets.
 Based on the above technical review, certain items of Electrical
 Installations and Equipment, Furniture and Fittings and Typewriter,
 Accounting Machine and Office Equipment are being depreciated at the
 rate of 15%, 20% and 20% respectively on straight line basis.
 
 g) Depreciation is provided in accordance with the provisions of the
 Companies Act, 1956, prevailing from time to time at the straight line
 method except (i) for mobile phones at the rate of 50% per annum, (ii)
 for items given to employees under the furniture equipment scheme which
 has been provided at the rate of 25% per annum for computers and 15%
 per annum for other items and (iii) for assets whose actual cost does
 not exceed Rs. 5000, which has been depreciated fully in the year of
 addition of the asset, irrespective of the date of such addition.
 
 h) Machinery Spares, which can be used only in connection with an item
 of fixed asset and whose use is expected to be irregular, are treated
 as fixed assets and depreciated over a period of five years (by
 charging depreciation @ 20% p.a. on straight line basis) or the
 residual life of the Principal asset , whichever is lower.
 
 2.  Valuation of Investments
 
 The long term investments made by the company appear at cost inclusive
 of acquisition charges. Provision is made for diminution in value
 considering the nature and extent of permanent diminution. Current
 investments appear at lower of cost or fair value.
 
 3.  Valuation of Inventories
 
 (i) Inventories are valued at lower of cost or net realisable value.
 For this purpose, the basis of ascertainment of cost of the different
 types of inventories is as under -
 
 a) Raw materials & trading goods (other than tea), stores & spare parts
 and materials for turnkey projects on the basis of weighted average
 cost.
 
 b) Work-in-progress on the basis of weighted average cost of raw
 materials and conversion cost upto the relative stage of completion.
 
 c) Finished goods on the basis of weighted average cost of raw
 materials, conversion cost and other related costs.
 
 d) Tea (unblended, blended and packed) - on the basis of specific cost.
 
 (ii) Tools, dies, jigs and fixtures are written-off over the economic
 life except items costing upto Rs. 10000 which are charged off in the
 year of issue.
 
 4.  Recognition of Revenue
 
 Revenue is recognised in compliance with the following:
 
 a) In case of sale of goods :
 
 When the property and all significant risks and rewards of ownership
 are transferred to the buyer and no significant uncertainty exists
 regarding the amount of consideration that is derived from the sale of
 goods. Sales are stated exclusive of Sales Tax / VAT.
 
 b) In case of services rendered:
 
 When performance in full or part as having achieved is recognised by
 the buyer and no significant uncertainty exists regarding the amount of
 consideration that is derived from rendering the services. Income from
 Services are exclusive of Service Tax.
 
 c) In case of project activities:
 
 As per the percentage of completion method after progress of work to a
 reasonable extent.
 
 d) In case of other income:
 
 i) Interest 
 
 on a time proportion basis taking into account the outstanding
 principal and the relative rate of interest.
 
 ii) Dividend from investments in shares
 
 on establishment of the Company''s right to receive.
 
 5.  Employee Benefits
 
 a) Company''s contributions to Provident Fund and Superannuation Fund
 are charged to Profit and Loss Account.
 
 b) Employee benefits in respect of Gratuity, Leave Encashment, Long
 Service Awards and Leave Travel Assistance are charged to Profit & Loss
 Account on the basis of actuarial valuation made at the year end.
 
 c) Post retirement medical benefit is also recognised on the basis of
 actuarial valuation made at the year end.
 
 6.  Payments made under Voluntary Retirement / Separation Schemes
 
 a) Compensation comprising of Ex - gratia , Notice-Pay and
 Rehabilitation Grant payable to employees separating under Voluntary
 Retirement / Separation Scheme till 31 March, 2005 is treated as
 Deferred Revenue Expenditure and iswritten off as per following
 instalments :- 
 
 (i) Paid upto December, 1999- Five equal yearly instalments;
 
 (ii) Paid during January, 2000 to March, 2005 - Sixty equal monthly
 instalments.
 
 b) Compensation under Voluntary Retirement/ Separation Scheme with
 effect from 1st April, 2005 - Charged off in the same financial year.
 
 7.  Treatment of Prior Period and Extraordinary Items
 
 a) Prior period items which arise in the current period as a result of
 error or omission in the preparation of prior period''s financial
 statement are separately disclosed in the current statement of profit &
 loss.  However, differences in actual income/expenditure arising out of
 over or under estimation in prior period are not treated as prior
 period income/expenditure.
 
 b) Income / Expenditure upto Rs. 10000 in each case pertaining to prior
 years is charged to the current year.
 
 c) Extraordinary items, i.e., gains or losses which arise from events
 or transactions which are distinct from the ordinary activities of the
 Company and which are material are separately disclosed in the
 statement of accounts.
 
 8.  Foreign Currency Translations
 
 a) All transactions in foreign currency other than those specified
 below are converted at the exchange rate prevailing on the respective
 dates of transactions.
 
 b) Monetary items denominated in a foreign currency (such as cash,
 balance in bank accounts, receivables, payables, etc ) are translated
 at the exchange rate prevailing on the date of Balance Sheet other than
 those covered with forward contract.
 
 c) Non-monetary assets denominated in foreign currency such as Long
 Term Investment, Inventories and Fixed Assets are carried at cost.
 
 d) In case of foreign branch, translation of the financial statement is
 made on the following basis -
 
 i) Revenue items except opening and closing inventories are converted
 at average rate. Opening and closing inventories are translated at the
 rate prevailing at the commencement and close respectively.
 
 ii) Fixed Assets and depreciation are converted at the exchange rate on
 the date of the transactions.
 
 iii) Other Current Assets and Current Liabilities are converted at the
 exchange rate as on the date of the Balance Sheet.
 
 e) Any income or expense on account of exchange difference either on
 settlement or on translation is recognised in the Profit & Loss Account
 except as stated above.
 
 f) Premium / discount arising at the inception of the forward exchange
 contracts entered into to hedge foreign currency risks are amortised as
 expense or income over the life of the contract. Exchange difference on
 such contracts are recognised in the Profit & Loss Account.
 
 9.  Accounting for Research & Development
 
 a) Revenue Expenditure is shown under Primary Head of Accounts with the
 total of such expenditure being disclosed in the Notes.
 
 b) Capital expenditure relating to research & development is treated in
 the same way as other fixed assets.
 
 10.  Treatment of Grant/Subsidy
 
 a) Revenue grant/subsidy in respect of research & development
 expenditure is set off against respective expenditure.
 
 b) Capital grant/subsidy against specific fixed assets is set off
 against the cost of those fixed assets.
 
 c) When grant/ subsidy is received as compensation for extra cost
 associated with the establishment of manufacturing units or cannot be
 related otherwise to any particular fixed assets the grant/subsidy so
 received is credited to capital reserve. On expiry of the stipulated
 period set out in the scheme of grant/subsidy the same is transferred
 from capital reserve to general reserve.
 
 d) Revenue grant in respect of organisation of certain events is shown
 under Sundry Income and the related expenses there against under normal
 heads of expenditure.
 
 11.  Accounting for Borrowing Cost
 
 Borrowing Costs that are directly attributable to the acquisition,
 construction or production of assets which take substantial period of
 time to get ready for its intended use are capitalised as part of the
 cost of those assets.  Other Borrowing Costs are recognised as expense
 in the period in which they are incurred.
 
 12.  Impairment of Assets
 
 An assessment is made at each Balance Sheet date to determine whether
 there is any indication of impairment of the carrying amount of the
 fixed assets. If any indication exists, an asset''s recoverable amount
 is estimated. An impairment loss is recognised whenever the carrying
 amount of the asset exceeds the recoverable amount.  The recoverable
 amount is the greater of the net selling price and value in use. In
 assessing value in use, the estimated future cash flows are discounted
 to their present value based on appropriate discount factor.
 
 13.  Cash Flow Statement
 
 Cash Flow Statement, as per Accounting Standard – 3 issued by The
 Institute of Chartered Accountants of India, is prepared using the
 Indirect Method.
 
 14.  Segment Reporting
 
 Segment Reporting is done as per Accounting Standard – 17 issued by The
 Institute of Chartered Accountants of India .The Company has identified
 business segment as its primary reporting segment.
 
 15.  Intangible Assets
 
 (a) Expenditure incurred for acquiring intangible assets like software
 of Rs. 5,00,000 and above and license to use software per item of Rs.
 25000 and above, from which economic benefits will flow over a period
 of time, is capitalised and amortised over the estimated useful life of
 the asset or five years , whichever is earlier, from the time the
 intangible asset starts providing the economic benefit.
 
 (b) In other cases, the expenditure is charged to revenue in the year
 in which the expenditure is incurred.
 
 16.  Provisions, Contingent Liabilities and Capital Commitments
 
 (a) Provision is recognised when there is a present obligation as a
 result of a past event and it is probable that an outflow of resources
 will be required to settle the obligation in respect of which a
 reliable estimate can be made.
 
 (b) Contingent liabilities are disclosed in respect of possible
 obligations that arise from past events but their existence is
 confirmed by the occurrence of one or more uncertain future events not
 wholly within the control of the Company.
 
 (c) Capital commitments and Contingent liabilities disclosed are in
 respect of items which exceed Rs. 1,00,000 in each case.
 
 (d) Contingent liabilities are considered only on conversion of show
 cause notices issued by various Government authorities into demand.